Isle of Man businesses report stable outlook amid staffing and cost pressures

Recruitment difficulties, rising costs, and infrastructure concerns feature in 2024 survey - but most firms still recommend the Island as a place to do business

A new government report suggests the Isle of Man’s business environment remains challenging but broadly stable, with signs of cautious optimism among employers.

The 2024 Business Environment and Conditions Survey - conducted by Statistics Isle of Man - found that around 60 percent of businesses reported no change in their overall situation over the previous six months.

The remainder were divided almost evenly between those who had seen improvement and those who had experienced a decline.

Expectations for the next six months are slightly more positive.

Thirty-two percent of businesses anticipate an increase in demand for their goods or services, compared to 14 percent expecting a fall.

Financial constraints and insufficient demand remain among the most cited challenges, with over 30 percent of businesses reporting economic pressures as a key concern.

Labour costs, energy prices and raw material costs were reported as the main drivers behind price increases, which were implemented by more than 40 percent of respondents. Despite this, most businesses said turnover and profitability remained flat or had declined.

Staffing pressures remain a significant issue.

Forty-three percent of businesses said they struggled to recruit over the past six months, particularly for skilled, manual, and technical roles.

Many cited a lack of suitably qualified applicants or low numbers of applications, while eight percent said they could not offer competitive salaries. Just over 45 percent reported that recruitment challenges had led to operational issues, including staff having to work longer hours and an inability to meet demand.

In terms of wider workforce trends, over half of businesses reported increased staffing costs and said they expected these to rise further in the near future. However, more than 80 percent stated they had no plans to make redundancies at the time of the survey.

The report also highlights continued concern over the Island’s education system.

More than 80 percent of businesses felt young people lacked at least one of the key skills required for work - particularly interpersonal and life skills. Nearly two-thirds said the education system was not responsive to the needs of the labour market.

Despite these issues, the Island remains broadly well-regarded as a business location. More than three-quarters of businesses said they would recommend or somewhat recommend the Isle of Man as a place to do business.

However, the number of firms who believe it is easy to do business locally appears to be falling, and satisfaction with core infrastructure remains mixed.

Two-thirds of respondents expressed dissatisfaction with the planning system, while over 70 percent of those for whom it was relevant reported dissatisfaction with the Island’s transport links.

The survey was conducted in October 2024 and is based on responses from 360 businesses. It replaces the former Business Confidence Survey last published in 2019.